Don't blame Greenpeace for UPA's sins: What the IB report really says

The controversy caused by the Intelligence Bureau (IB) study suggesting 2 percent of India's GDP may have been lost due to NGOs like Greenpeace working assiduously to stall coal-based power projects has, quite unwittingly, brought out how the UPA simply lost the opportunity to maintain GDP growth at 8 percent, and to prevent its collapse to a decade low of 4.7 percent.

If one looks closely at the numbers presented by the Intelligence Bureau, they appear more like an indictment of the UPA government, rather than that of NGOs like Greenpeace.

For instance the IB argues that roughly 500 gigawatts of coal based power were being planned beginning 2007 and these projects were to come on stream from 2013 onwards, thus fructifying into final output in the form of electricity.

If this entire output had been produced by all the upcoming coal based power projects, the resultant addition to national output would have been of the order of 6 percent of GDP. The IB assumes the power companies working at the current thermal power sector have an average plant load factor of 65 percent.

 Dont blame Greenpeace for UPAs sins: What the IB report really says

Reuters

So if 6 percent of GDP had got added to India's output in the last two to three years -- assuming all projects would not commence at the same time-- it is easy to assume an overall GDP growth of over 8 percent throughout this economic cycle.

And mind you,the IB report accuses Greenpeace of affecting only 20 percent of the 500 GW capacity which was being executed from 2008.

So who is responsible for stalling the other 80% of the power projects which were crying for coal supply? This was squarely the collective responsibility of the UPA government.

So why blame the NGOs who were just doing their job of opposing such projects on environmental grounds? It was the government's job to counter advocacy and convince the people that a balance needed to be struck between development and environmental concerns.

The UPA clearly failed to do so and instead got caught in myriad procedural scams in regard to coal allocations. Of course, non Congress state governments were equally complicit in the coal allocation mess, which had little to do with the NGOs protesting use of coal based power.

The IB may also want to calculate the loss to the GDP caused by the coal allocation scam. This includes not just allocation for power projects but also for steel and cement projects.

Over 195 coal blocks are under CBI investigation today and these cannot be released for economic activity. If the Central and State governments had transparently allocated these coal assets India's GDP fall could have been much higher.

Former Planning Commission member Saumitra Chaudhary added another dimension to the IB report suggesting loss of GDP on account of delay in 500 GW of power projects.

"There is also a positive service sector spillover effect if some of these power projects had fructified. Services such as transport through rail and road would have got a boost as coal and other raw materials are transported for these projects", said Mr.Chaudhary.

So the primary responsibility of the loss of GDP must be laid at the door of the Central and State governments for the loss of GDP caused by the undue delay of coal based power projects in India. It remains to be seen how quickly the BJP government is able to rectify this situation.

The big message from the IB report really is that if you just execute your power and other infrastructure projects properly on time, a GDP growth of 8 percent plus is there for the taking.

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Updated Date: Jun 18, 2014 16:06:12 IST